Social Problems Are Like Maths

Wednesday, 21 May 2014

Amidst their recent popularity, the United Kingdom Independence Party has tried to encourage the perception that they stand outside the established political consensus, offering arguments and perspectives neglected by mainstream political debate. This of course, is at odds with the fact that support for most UKIP policies can be found in the mainstream rightwing press every week. There is nothing daring about talking about exiting the EU, or transgressive about plotting to reduce immigration. UKIP might have other radical concerns or proposals, but they certainly haven’t told anybody yet: Nigel Farage disowned his 2010 General Election manifesto, and has failed to disclose any updated domestic policies. It’s only with his recent comments on Romanians that Farage has said anything genuinely controversial, and he has expressed ambivalence since.

By contrast to UKIP’s flimsy policy platform, it is the Green Party, the other lot outside the mainstream party system, who have genuinely consensus shaking ideas. To take a few examples:

On Migration (note that it is ‘migration’, rather than immigration; not just an issue of coming, but leaving), the Greens turn the standard debate on its head, challenging the assumption that rich countries have a right to exclude foreigners, and framing the debate around global inequality, rather than the economic self-interest of the UK

On Economic Inequality, the Greens argue for a Citizens’ Income, an unconditional sum of money for all citizens to prevent destitution and allow them a degree of freedom from the pressing imperative for a job and income, allowing them to develop their education, family life etc. This is a radical policy with prominent historic advocates on the left and the right, yet one which is unknown to most Britons today

On International Trade, the Greens express a degree of scepticism about free trade uncommon among major parties or the mainstream media. There is a general acceptance in the UK that the free movement of goods and services (though not labour) is an unmitigated boon. Even UKIP, for all their mistrust of the European common market, want to set up a Commonwealth Free Trade Area. By contrast, the Greens oppose the Transatlantic Trade and Investment Partnership, seeing it as undemocratic, and emphasise ‘fair trade’ over ‘free trade’

On Public Services, the Greens are committed to nationalising railways, water and energy, policies that are highly popular, but rejected by the other big parties.

The position of the Greens highlights the benefits and dangers of genuinely defying consensus. On some issues, like nationalisation, you are likely to hit a position that has widespread appeal, and find yourself speaking for the ordinary man against an out of tough elite. On other issues, like, immigration, you’ll be voicing a fringe viewpoint that will likely get you written off as lunatic. And in some cases, as with the basic income, the idea will be so untested that you just won’t know how people will respond until you test it.

However they are received, greater acknowledgement of Green positions would stimulate and enhance what are often stale political debate.

Monday, 28 April 2014

In a recent Vox article, Matthew Yglesias argues for punitive income and inheritance taxes. His logic is that these taxes can have benefits beyond just raising government revenue – by deterring the high pay and large bequests that encourage socially harmful inequality, they can be beneficial even if nobody pays them.

Yglesisas repurposes the reasoning that underpins excise taxes, such as those on tobacco or gambling, and applies it to income and inheritance:

Tax T discourages behaviour B, which contributes to social problem P

Where T can be tax on cigarettes, behaviour B smoking and P the public health cost of smoking-related disease. Or in Yglesias’ argument, T is income tax, B is high corporate pay and P is income inequality.

An interesting question is whether this line of thinking can be used to justify rises in other existing taxes. I have previously discussed the possibility that income tax could be used as a means to reduce working hours – Rupert Read claims that “high tax rates are a good thing inasmuch as they discourage the culture of overwork which grips societies like ours”.

Another interesting application would be to increase sales tax (eg VAT) on ‘positional goods’, such as luxury fashion items and jewellery, which are bought primarily to increase the owners’ social status. Besides the direct negative effects for those who have to endure the other people’s wealth being shoved in their faces, the purchase of these goods also leads to an ‘arms race’, where households spend more and more in an effort to best each other, with more of their money diverted from things that they will genuinely enjoy. Higher sales tax on luxury items would mean fewer purchases of positional goods, lower status anxiety and help defuse the consumption arms race.

Robert Frank has gone further and advocated scrapping income tax and replacing it with a progressive consumption tax for these very reasons. Under Frank’s scheme, households would have to disclose their incomes and savings to the tax authorities, and would be taxed on the remainder. This is an interesting idea, but I have a couple of reservations. First, this seems an unnecessarily bureaucratic system involving a lot of paperwork and scope for errors. Secondly, it is clearly the case that not all consumption is on positional goods. Frank would tax spending on food and rent, money spent on meeting basic needs. By contrast, a positional goods tax can be targeted at more expensive goods that are more likely to be for display, rather than being intrinsically valuable.

However reformed, income tax and sales might just be the tip of the iceberg in terms of Yglesias’ argument – what other existing taxes can be reconsidered as excise duties?

This race, we are told, is economic. Our opponents are usually specified: the rising countries of Asia and South America such as China, India and Brazil. Yet the prize is vaguely and promiscuously defined: ‘jobs’, ‘wealth’, ‘growth’, ‘trade’, ‘talent’, ‘technology’, ‘skills’, ‘capital’, ‘competitiveness’, ‘big ideas’,‘influence’, innovation’, ‘investment’, ‘investment opportunities’, ‘recovery’

This lack of clarity leads to the suspicion that the argument is not the result of any analysis of global economic and social trends, but is rather an exercise in creating a foreign bogeyman to threaten those who object to Tory policies.

Recovery in Europe is vital. But our continent is falling behind. Over the past six years the European economy has stalled. In the same period the Indian economy has grown by more than a third, and the Chinese economy by almost 70 per cent. Europe’s share of world patent applications almost halved in the past decade. A quarter of young people looking for work cannot find any. Europe accounts for just over 7 per cent of the world’s population but 50 per cent of global social welfare spending. Reform is the key.

But in each of these domains the metaphor of a race is misleading – either because they are focusing on the wrong metric or because a competitive approach is inappropriate

Though Osborne and Schauble do not explicitly refer to the idea of a global race, this is clearly the image they are trying to invoke when they worry that “our continent is falling behind”. But who is Europe falling behind, and in which race?

The first race, it becomes clear, is the race for higher economic output. In this race, Europe is falling behind China and India, as they have seen higher growth in the past six years. Stated so clearly, the absurdity of the claim should be apparent – rich Europe cannot be falling behind much poorer countries like China and India – it is clearly ahead of them.* Rather, what is happening is that China and India are catching up to the EU.

Being caught up might not be as bad as falling behind, but it’s still almost always a bad thing. Yet there are a couple of salient facts required to put that in context. The first is that this is a race where it is harder to lead than to chase. The economic principle of convergence means that poorer countries will tend to grow faster than rich ones, essentially because they can trade with and copy technologies from them. The GDP race is one that it is hard to lead – the EU is like a cyclist which must accept that other riders will benefit from their slipstream. Thus lower growth than India or China is not a tragedy to be bemoaned, but the almost inevitable consequence of having a bigger economy. The real problem for Europe is its lack of growth in absolute terms.

The second critical fact is that this is not a case of Europe needing to fend off immediate rivals in a close race Rather, Europe, in seeking to extend its lead over India and China, is like a runner sprinting to lap straggling laggards in the race. Depending on the source, average EU income is 20th-30th in the world. By contrast, China is placed in the 90s and India in the 130s. Stepping out of the metaphor, there is something deeply unpleasant about Europe seeking to out-grow poor countries like India and China. If Osborne and Schauble want faster growth than India and China, then by implication what they want is a more grossly unequal world where the rich are even more distant from the global poor than before.

The second race that Osborne and Schauble want to win is the competition for most patent applications. They are correct that Europe’s share of global patents has declined, but again, they fail to provide the relevant context. First, in absolute terms, patent applications are around 50% higher than a decade ago, according to World Bank data. Second, this seems like another area where convergence has occurred – the EU still has more patents per capita than average, with 10% of global applications, despite (as Osborne and Schauble later observe) having only 7% of the global population.

The third point made is around youth unemployment. However, there is no comparative metric used to illustrate this, so it’s not clear who Europe is supposed to be ‘falling behind’.

Osborne and Schauble’s fourth indicator is the most pernicious – social welfare spending. This is one race where it is particularly unclear what constitutes ‘winning’. I personally would have thought that out-spending other countries would be beating them, but it is clear that the finance ministers see Europe’s high spending as a failure. But I can only presume that they do not see having the lowest social welfare spending in the world as a desirable goal, either.

The fact that Osborne and Schauble offer the context of Europe’s population suggests they see this as some sort of odd ‘race to the middle’ – in their view Europe should be closer to average global social spending. The implication is that social spending is a ‘goldilocks good’ – some is desirable, but too much is a bad thing. But if this is the case, why should we take the global average to be the best indicator of the ideal level? Being above the global average for social spending could just mean that other countries spend too little on social welfare. And in this case that is almost certainly what it means. Why should we care about an average that is clearly pulled down by developing countries lacking the finances to develop welfare states of their own?

There are almost certainly some domains where competitive global comparison is the appropriate way to think about them. But Osborne and Schauble’s letter suggests the Conservatives still haven’t found them

* Even is the race is in terms of absolute GDP (ie not adjusted for China and India’s larger populations), the EU remains clearly ahead of India and just ahead of China

Sunday, 12 January 2014

A cosmopolitan nationalist is a contradiction in terms. Yet I want to suggest that in some cases consistent cosmopolitans may be justified in supporting nationalist causes – in particular, voting ‘yes’ in independence referenda like the ones anticipated in Scotland and Catalonia in 2014.

Cosmopolitanism is the moral or political theory that insists that nationality is morally arbitrary – that we have no greater reason to promote or care about the welfare of our compatriots than people of any other country. This is, almost by definition, antagonistic to nationalism, which insists that we woe at least some loyalty to our nation and its inhabitants. Cosmopolitanism means, literally, citizenship of the world. Nationalism seeks to carve out a slice of the world, and put it above others.

So cosmopolitans and nationalists are certainly unlikely comrades, but if circumstances conspire in the right way, I think they can end up on the same side.

The first point to make is that while cosmopolitans embrace global citizenship in a moral sense, few major cosmopolitans have called for its institutional corollary – a world state. Thomas Pogge offers perhaps the most prominent discussion of an ideal cosmopolitan global order, and maintains an important role for nation-states, as part of a ‘multi-layered’ order, with power diffused down to regional institutions and up to global organisations. Moreover, Pogge sees secessionist referenda, as in Scotland or Catalonia, as part of the “cosmopolitan ideal of democracy”:

“The inhabitants of any contiguous territory of reasonable shape, if sufficiently numerous, may decide-through some majoritarian or supermajoritarian procedure-to form themselves into a political unit of a level commensurate with their number”

Even commitment to a world state does not necessarily entail opposition to secession. After all, voters are being asked to choose between Scotland and the UK, or Catalonia and Spain – ‘World State’ is unlikely to appear on any ballots. On the face of it, World Staters are likely to oppose secession as it represents a move further away from a World State – greater fragmentation, rather than unity. But it could be that a more indirect route to global unification seems more likely – for example, if one of the new states is more open to multi-national institutions (as Scotland appears to be more supportive of the EU than the rest of the UK). More likely, neither option will make a World State substantially more likely, in which case the World Stater is in the same position as other cosmopolitans, forced to fall back on other considerations.

So what considerations should guide a cosmopolitan voter? While Pogge suggests that cosmopolitans should accept the decisions of referenda, he does not offer any guidance on how to decide which side to support once a referendum is called. One possibility is that this falls within the legitimate sphere of compatriot preference that some cosmopolitans accept – that this is one area where it is OK to give voice to nationalist sympathies. If this is the case, then the decision is simple - the cosmopolitan is free to vote for whichever country they feel most emotional attachment to.

But suppose we want to deny it is ever legitimate to show compatriot preference, or perhaps that we genuinely have no emotional preference? In that case, there are three relevant considerations that a cosmopolitan needs to account for:

1. Will secession leave the new country (ie Scotland/Catalonia) better off?

3. Will secession be better for those from other countries (eg Spain, Romania, Somalia, Niger)?

This might seem trivial, but it is important to bear all three considerations in mind when reviewing the arguments for independence. For starters, notice that the vast majority of the debate addresses only consideration 1.

The cosmopolitan must therefore be indifferent to any zero-sum nationalist claims. If Catalonia claims it will be richer with independence because it will have to share less of its wealth with Spain, then the cosmopolitan will not see this as positive, since it will make Spain worse off. Moreover, they must be alert to knock-on effects. If an independent Scotland would be a fairer, more equal place than rUK, this good must be balanced against the harm to the rest of Britain of losing Scotland’s moderating influence (and, for example, embracing neo-liberalism more fully). Cosmopolitans are also likely to pay particular attention to domains like foreign and immigration policy which impact people of other nationalities. Thus an independent Scotland’s more pacific stance in international relations and greater openness to immigration is likely to strengthen the cosmopolitan’s appetite for independence (assuming, of course, that this does not significantly affect rUK’s policy).

Thus a cosmopolitan’s reasoning on the independence question is likely to be more complex and more pragmatic than most. other voters. There are more interests to be considered, certain arguments that must be thrown out, other arguments that must be given greater emphasis. But it is entirely possible that independence may be the course that best promotes cosmopolitan values.

Tuesday, 31 December 2013

2013 has seen growing interest in
the idea of ‘people analytics’ – informally described as the application of ‘Moneyball’
to corporate HR, but more formally defined as the use of predictive statistical
analysis to inform the recruitment and assessment in workers. Just as sports
teams are increasingly attuned to the power of statistics in judging player
ability and informing their signings, so companies are looking to use the power
of numbers over potentially misleading ‘gut instincts’ and all too short
interviews. The hope is that the use of ‘big data’ can offer more reliable
insight into the attributes that make for effective employees by drawing robust
correlations. For years baseball coaches focused on the wrong statistics,
according to Moneyball, for example emphasising batting average, rather than On
Base Percentage. Perhaps the same is true of Human Resource managers, who could
be over-emphasising things like educational attainment – an early finding
appears to be that college degrees are overrated.

Commentators have been divided as
to whether the people analytics is a promising or ominous development for
society. For Don Peck, people analytics offers hope for fairer hiring processes,
with the marginalisation of (often unintentionally) prejudiced human
intervention, since “A mountain of scholarly literature has shown that the
intuitive way we now judge professional potential is rife with snap judgments
and hidden biases”. Moreover, people analytics can enhance social mobility by reducing
the influence of educational background:

For decades, as we’ve assessed people’s potential in the professional
workforce, the most important piece of data—the one that launches careers or
keeps them grounded—has been educational background: typically, whether and
where people went to college, and how they did there. Over the past couple of
generations, colleges and universities have become the gatekeepers to a
prosperous life...But this relationship is likely to loosen in the coming years

However, Andrew Leonard is wary
of a world in which bosses have a clear view of their employees’ productivity,
foreseeing “a darker scenario, one that increasingly seems to be playing out
already: The best workers reap huge rewards; everyone else struggles for the
scraps”.

To a large
extent these arguments play out familiar debates from political philosophy over
the value and desirability of meritocracy. Peck’s account of helping those
consigned to the scrapheap because of their past, or neglected because of
latent prejudice gets to the heart of the view that meritocracy is morally
valuable because it avoids wrongful discrimination. On the other hand, Leonard
taps into a concern that meritocracy neglects substantive inequalities – as Adam Swift puts it: “Why care about unequal chances
of mobility between positions rather than the extent to which those positions
are unequal?”. Moreover, there is the concern that material
inequality could be exacerbated by the psychological effects of living in a
perfect meritocracy, as famously suggested by Michael Young:

If meritocrats believe, as more and
more of them are encouraged to, that their advancement comes from their own
merits, they can feel they deserve whatever they can get.

They can be insufferably smug, much more so
than the people who knew they had achieved advancement not on their own merit
but because they were, as somebody's son or daughter, the beneficiaries of
nepotism. The newcomers can actually believe they have morality on their side.

Thus if meritocracy is
achieved, the successful develop a superiority complex and increase their power and privilege while the
unsuccessful lose all sense of self-worth, with nobody to blame for their
plight but themselves. The result is a society polarised beyond recognition.

Peck and Leonard do not add
anything distinctive to the debate around meritocracy, but rather offer a
glimpse of a society which more closely approximates meritocracy. However, I
think that people analytics has the potential to bring to the surface tensions
which are currently insignificant or neglected in the meritocracy debate.

First, people analytics could
have an effect on the perceived relationship between meritocracy and economic efficiency.
One common rationale for meritocracy is that ensuring that the best candidates
are in the best positions should secure higher productivity and consequently
make society as a whole richer. But this is not necessarily the case. If the
cost of securing a better candidate is greater than the extra wealth generated
by that worker (over and above the candidate that would otherwise be hired)
then meritocratic hiring is less efficient.

People analytics is likely to
bring this tension into the open because it is likely to develop more or less
fine grained tools, leaving it to the hirers how much they believe it is worth
investing in securing the best workers. In some cases, cruder and cheaper
methods are bound to be chosen, even though they might mean overlooking the
best person for the role, because the cost of identifying that person is greater
than the benefit they would provide. This is likely to test the resolve of
meritocrats – is their ideal important enough to force companies to invest in
recruitment, even if is not worth the cost?

A second – more hopeful –
possibility is that people analytics might bring to the fore the flexibility of
the concept of merit. Peck alludes to the possibility that people analytics
might be more about getting people into “better-fitting”, rather than “better” jobs.
That is – people analytics might be less about separating the capable and
brilliant from the incompetent than about finding the niche that suits each
individual’s aptitudes.

Even if this is a bit utopian,
people analytics could help bring to the fore the changeability of marketable
skills. The original idea of Moneyball was not to find the best players, but
rather those who are ‘undervalued’ – players whose talents were insufficiently
appreciated by the market. This is an inherently dynamic process – for as soon
as other teams adopt a similar scouting and tactical style, a different type of
player will become undervalued. A couple of cycles of this process should serve
to demonstrate that success is not simply about being the best player, but to have
the right skills for the right environment.

If people analytics produces
similar cycles in the job market, then it should reinforce to the successful
that they are lucky, and that at any given point their luck could change.
Moreover, this sense of contingency is likely to guard against the arrogance
and despair that Michael Young foresaw in his vision of meritocracy.

The idea of meritocracy is a
complicated one, offering hope for human dignity and equality on the one hand,
but carrying the risk of polarisation and division. The prospect of people
analytics further clouds the purported ideal – its development must be watched
carefully.

Sunday, 3 November 2013

Contrasting the different challenges facing British and American healthcare, Janet Daley attacks the “anachronistic and unsatisfactory” arrangement of a “state-owned-and-run monopoly of medical provision”. This throws up a number of obvious issues around the equity, efficiency and sustainability of these different models. But even aside from the questions of whether state run healthcare is cheaper, more equal or produces better health outcomes, I think Daley accidentally touches upon a couple of underappreciated benefits of the NHS style system: the limitation of unpleasant choice, and avoidance of the distrust of the market.

“Note to politicians: there is a new generation of adults out there who buy their holidays and their electronic equipment on the internet, who purchase their insurance on price-comparison websites”

Daley makes the automatic assumption that because they live in a consumerist society and are constantly making consumer choices, people must desire and enjoy these choices. We do live in an era where most people purchase their insurance on the internet. But that doesn’t mean that they like doing so – in fact, the majority of people see it as an unpleasant chore. The ubiquitous adverts for price comparison websites are intended a) to motivate people to exercise their consumer choice and b) to convince people that acting the consumer is less unpleasant than they expect.

So why then does Daley assume that the NHS deprives people options they want to take, rather than preserving them from having to go through tedious and time consuming decisions? I can’t be the only one to look at the process of Obamacare and be extremely grateful that I don’t have to worry about health insurance, don’t have to sit down on my hard-earned weekend and run through the different plans, however nicely they are laid out. I can’t be the only one grateful that I don’t need to worry about anything, and can still know I will receive care when I need it.

“A system that is absolutely, unconditionally free at the point of use with no questions asked and no exceptions made”

Daley sees this as an outdated principle which can only cause problems. But one benefit this principle brings is obvious. It means that the unwell and their families never need to worry about money at a stressful and difficult time. Even if the money can be claimed back, even if the excess is small, the fact of needing to have money free to pay for care just adds another potential headache at a difficult time.

But, more subtly, the fact of money changing hands alters the social dynamic between doctor and patient. For example, psychologists have shown that ‘priming’ people with the idea of money alters their outlook: it makes them more individualistic and less socially-oriented, a worrying trait to encourage in doctors.

Moreover, the exchange of money creates a more ‘transactional’ relationship between doctor and patient, and potentially erodes trust between doctor and patient. The doctor’s job is no longer to make me better, but to get the most money out of me. How do I know they are prescribing that drug because it is the most effective and not because it is the most expensive?

Now I’m sure Daley would respond that those willing to take the time and effort to work out their optimal health insurance plan will receive better care at a lower cost. And she would probably say that a bit more mistrust between doctor and patient might make doctors less complacent, and force them to improve standards to meet the challenges of their patients. I have my doubts, but they are not implausible claims, However, she cannot deny that something has been lost, that people would be in these ways worse off, without the NHS. And so a lot depends on showing that cost and effectiveness would be clearly higher with greater privatisation.

Sunday, 22 September 2013

Ahead of today’s general election, the German broadcaster ZDF has broken with convention and published an opinion poll in the final few days before the vote. Previously, it had been agreed that surveys would not be released fewer than ten days before polling day for fear of influencing voters. This is a worrying development because it conflicts with three of the most prominent theories about why democracy is valuable: aggregative, epistemic and deliberative theories.

According to the aggregative theory, democracy is fundamentally a procedure for reconciling the different interests and preferences of citizens. On any given issue, citizens will come with ready-formed preferences, based on their personalities and circumstances. It does not matter why people want to criminalise cannabis or ban the burqa – the only salient question is whether more people are for or against these proposals. The more popular policies are the ones that should be enacted.

However, aggregative democracy depends on people accurately reporting their preferences. If we cannot rely on voters to vote for the policies they actually want, then the vote will not reveal which proposal is genuinely more popular, the one which satisfies the most preferences. Opinion polls make it more likely that people’s votes will not reflect their true preferences. If my favoured party or policy is far behind in the poll, I may believe it is pointless to vote for them, or even to bother to vote at all. Opinion polls make tactical voting more likely – I may cast a positive vote for a policy or party that I don’t like to stop a worse one succeeding. In other words, opinion polls help to mess up the clean aggregative interpretation of elections.

A second major theory of democracy is the epistemic view. Epistemic theories see democracy as trying to find the ‘correct’ or ‘true’ answers to political questions, such as ‘What is the best set of policies to encourage economic growth?’ Epistemic theories take their inspiration from ideas such as the wisdom of crowds – the notion that the more views are canvassed on an issue, the more likely they are to converge on a correct answer.

This basic principle is formalised in the Condorect Jury Theorem. However, one of the key assumptions of the theorem is that votes must be independent – person 1 voting for A should not make it any more likely that person 2 will vote for A. Imagine if you ask two separate people for directions, and they both advise you to go right. This would ordinarily give you reasonable confidence that this advice is sound. But if you knew the second person was only copying the first, you would be more likely to seek further verification.

Opinion polls may flout the independence criterion valued by epistemic theorists of democracy, because of the momentum they create. If my instinct is to vote Pirate, but everybody else appears to be voting CDU, I am bound to wonder if I have missed something incredible in the CDU platform. Conversely, the lack of support for the Pirates is likely to make me reconsider their competence. The Asch conformity experiments show that people are susceptible to peer pressure even on beliefs they have a great deal of confidence in – these effects are liable to be even more acute in politics.

A third perspective on democracy emphasises deliberation. According to this view, democracy is as much about forming opinions as aggregating them. Thus deliberative democracy emphasises free, open and rational debate, whereby citizens attempt to criticise and refine their own views, as well as understanding those of others, in the hope of achieving consensus.

Deliberative democrats have reason to fear opinion polls because they distract from the process of debate. They distort media coverage and public attention by encouraging passive spectatorship of a competition, rather than engagement with ideas and policies. This creates a ‘horse race’ model of politics, where tactics, strategies and who’s winning draws more focus than substantive discussion of different platforms. Moreover, deliberative democrats are wary of excessive focus on voting rather than other elements of the political process (such as deliberation), a trend exacerbated by polling.

These arguments may give opinion polls too much credit – it could well be that they have much less influence on voting behaviour than suggested here. However, if opinion polls are in fact this powerful, they may indeed be damaging for democracy.